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Clinton raises trade stakes by reviving tariff threat

Unable to achieve a breakthrough in his battle to open Japanese markets, President Clinton brought back to life the most feared weapon in America's trade arsenal on Thursday.

By executive order, the president revived an expired provision of U.S. law known as Super 301. The president said he would put forward by Sept. 30 a target list of countries deemed to have erected the most harmful barriers to American goods and services.

If negotiations fail to remove those barriers, the administration would have the power to impose punitive tariffs of up to 100 percent against exports from those nations. The amount targeted would equal the sales being lost by American producers.

"This administration is committed to opening markets for high-quality goods and services produced by competitive American workers," the president said as he announced his decision. "This action will help us reach our objective _ open markets that will create better jobs and increase wages at home and abroad."

Administration officials denied they were trying to start a trade war with Japan, but they said the United States would not relent in its efforts to open Japan's markets as a way of narrowing a record $59.3-billion trade imbalance between the two nations.

The administration already has the power to initiate market-opening investigations and impose tariffs if the talks fail to produce results under the regular Section 301 of the 1974 trade act.

What Super 301 provides is a strict timetable for results. The clock will begin running March 31 with publication of an annual "National Trade Estimate Report" that provides a survey of unfair trade practices that are harming U.S. exporters around the world.

From that list, the administration will by Sept. 30 designate "priority foreign country practices" that are blocking the largest amount of U.S. exports and begin a 21-day period of preliminary negotiations.

If those preliminary talks fail to produce results, the United States would initiate a formal investigation that could take up to 18 months and allow time for further negotiations.

Only if those talks proved fruitless would the United States impose sanctions. That period could stretch until March 1996, although administration officials said if the talks were going nowhere, sanctions could come much sooner.

In 1989, the United States targeted Japan, Brazil and India and reached successful agreements dealing with super computers, satellites and wood products with Japan and removal of restrictive import licenses in Brazil. Talks with India were unsuccessful.

Other countries have been universal in their condemnation of the Super 301 procedures, assailing the process as unilateral bullying.

"We regret that the United States made a decision to revive Super 301," Seiichi Kondo, a spokesman for the Japanese embassy, said in Washington. "We certainly hope the United States will recognize the inherent dangers" in imposing unilateral trade sanctions.

Other Japanese officials have warned about counter-retaliation on the part of Japan if the United States slaps punitive tariffs on Japanese products, a development that would spark a full-blown trade war between the world's two largest economies.

U.S. Trade Representative Mickey Kantor said the administration had no choice but to revive Super 301 in its efforts to open Japan's markets.

The decision was made in the wake of the collapse of "framework" trade talks between the United States and Japan on Feb. 11 that marred a summit meeting between Clinton and Japanese Prime Minister Morihiro Hosokawa.

The president called Hosokawa to inform him personally of the decision and described the talk as a "friendly, forthright" discussion.

Before the two leaders talked, Hosokawa had told a parliamentary committee that "I strongly hope that the U.S. government will judge and act in good sense."

The two countries appeared no closer to resolving the fundamental dispute between them _ a U.S. demand that Japan agree to setting specific import goals in the framework talks. The Japanese have said they will put forward a new market-opening offer by the end of this month.